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Medicare Part B

Medicare Made Easy

Medicare Part B

Medicare Part B (which is medical insurance) is part of Original Medicare and covers medical services and supplies that are medically necessary for treating your health condition. This may include outpatient care, preventive services, ambulance services, and durable medical equipment (DME). It will also cover part-time or intermittent home health and rehabilitative services, like physical therapy, if they are prescribed by a doctor for treating your condition.

Medicare Part B also covers more expensive services that sometimes occur in the hospital. This includes services like radiation or chemotherapy for cancer, surgeries, diagnostic imaging, medical equipment, and even dialysis for failing kidneys. Part B will also pay for drugs administered in a clinical setting, like osteoporosis injections, infused drugs, antigens, and insulin that is used with an insulin pump. Otherwise, outpatient drugs fall under Part D.

Some preventive services are also covered by Medicare Part B including a one-time “Welcome to Medicare” preventive visit, flu and hepatitis B shots, cardiovascular screenings, cancer screenings, diabetes screenings, colonoscopies, mammograms, and more. For a full list of the preventive services covered under Medicare Part B, please refer to the Medicare handbook, “Medicare and You.”

Of course, Part B is optional, however, if Medicare is your primary coverage, you definitely need Part B.  Also, you cannot get Medigap supplemental coverage without it.

Medicare Part B covers 80% of approved costs after you first pay the annual deductible.

Eligibility for Medicare Part B

Whoever is eligible for premium-free Medicare Part A is eligible for Medicare Part B by enrolling and paying a monthly premium. If you are not eligible for premium-free Medicare Part A, you can qualify for Medicare Part B by meeting these following requirements:

  • You must be 65 years or older.
  • You must be a U.S. citizen, or a permanent resident lawfully residing in the United States for at least five consecutive years.

You can also qualify for automatic Medicare Part B enrollment through disability. If you are under 65 and receiving Social Security or Railroad Retirement Board (RRB) disability benefits, you will automatically be enrolled in Medicare Part A and Part B after 24 months of disability benefits. You may also be eligible for Medicare Part B enrollment before 65 if you have end-stage renal disease (ESRD) or amyotrophic lateral sclerosis (also known as ALS, or Lou Gehrig’s disease).

When to enroll in Medicare Part B

If you are receiving retirement benefits before age 65 or qualify for Medicare through disability, generally you’re automatically enrolled in Medicare Part A and Part B as soon as you become eligible.

If you do not enroll during your initial enrollment period and do not qualify for a special enrollment period, you can also sign up during the annual General Enrollment Period, which runs from January 1 to March 31, with coverage starting on July 1. You may have to pay a late enrollment penalty for not signing up when you were first eligible.

If you’re not automatically enrolled, you can apply for Medicare through Social Security, either in person at a local Social Security office, through the Social Security website, or by calling 1-800-772-1213 (TTY users 1-800-325-0778) from 7AM to 7PM, Mon through Fri.

Keep in mind that once you are both 65 years or older and have Medicare Part B, your six-month Medigap Open Enrollment Period will begin. This is the best time to purchase a Medicare Supplement (Medigap) insurance plan because during open enrollment, you will have a “guaranteed-issue right” to buy any Medigap plan without medical underwriting or paying a higher premium due to a pre-existing conditions*. Once you are enrolled in Medicare Part B, be careful not to miss this one-time initial guaranteed-issue enrollment period for a Medicare Supplement.

Delaying Medicare Part B enrollment

Some people may get Medicare Part A “premium-free,” but most folks have to pay a monthly premium for their Medicare Part B. Because Medicare Part B comes with a monthly premium, some people may choose not to sign up during their initial enrollment period if they are currently covered under either their own, or through their spouse’s employer, an employer health group plan (EGHP).

If you are still employed, you should check with your health benefits administrator to see how your insurance would work with Medicare. If you delay enrollment in Medicare Part B because you already have current employer health group coverage, you may sign up later during a Special Enrollment Period (SEP) without paying a late penalty. You can enroll in Medicare Part B at any time that you are still covered by a group plan based on your current employment. After your employer health coverage ends or your employment ends (whichever comes first), you have an eight-month SEP to sign up for Part B without incurring a late enrollment penalty.

Keep in mind that retiree coverage and COBRA are not considered health coverage based on current employment and would not qualify you for a SEP. If you have COBRA after your employer coverage ends, you should not wait until your COBRA coverage ends to sign up for Medicare Part B. Your eight-month Part B special enrollment period begins immediately following when your current employment or group plan ends (whichever comes first). This is regardless of whether you get COBRA. 

Medicare Part B Late Enrollment Penalty

If you failed to sign up for Medicare when you were first eligible, and you didn’t have any creditable coverage, you are subject to the Medicare Part B late enrollment penalty. This penalty is equal to 10% per year for every year (12 full months) that you waited to enroll. This penalty gets applied against the standard Part B premium, which in 2020 will be $144.60.

When you do finally enroll, you’ll need to wait for the Medicare General Enrollment Period to sign up for Part B. This period runs from January 1st to March 31st each year. Your benefits will then begin the following July. This can be a double whammy because not only do you now owe a penalty, but you have to wait several months for your coverage to kick in.

If you enrolled late because you’ve had employer group health coverage from a company with 20 or more employees, you will not be subject to the Medicare Part B late enrollment penalty. When you leave that coverage, you have 8 months to sign up for Part B. This is called your Special Enrollment Period for Medicare.

The best way to avoid the Medicare Part B late enrollment penalty is to enroll in Medicare during your Initial Enrollment Period

Medicare Part B premiums

Medicare Part B premiums may change from year to year, and the amount can vary depending on your situation. For many people, the premium is automatically deducted from their Social Security benefits.

The standard monthly Part B premium:  $144.60 in 2020.

If your income exceeds a certain amount, your premium could be higher than the standard premium, as there are different premiums for different income levels.

See below for more details about the Medicare Part B premium.

If you are receiving Social Security, Railroad Retirement Board, or federal retirement benefits, your Part B premium will be deducted directly from your monthly benefit. If not, you will be sent a bill every three months.

The chart below shows the Medicare Part B monthly premium amounts, based on your reported income from two years ago (2017 in this example). These amounts may change each year. A late enrollment penalty may be applicable if you did not sign up for Medicare Part B when you were first eligible. Your monthly premium might be 10% higher for each 12-month period that you were eligible, but didn’t enroll in Part B.

 
If your yearly income in 2018 (for what you pay in 2020) wasYou pay each month (in 2020)
File individual tax returnFile joint tax returnFile married & separate tax return
$87,000 or less$174,000 or less$87,000 or less$144.60
above $87,000 up to $109,000above $174,000 up to $218,000Not applicable$202.40
above $109,000 up to $136,000above $218,000 up to $272,000Not applicable$289.20
above $136,000 up to $163,000above $272,000 up to $326,000Not applicable$376.00
above $163,000 and less than $500,000above $326,000 and less than $750,000above $87,000 and less than $413,000$462.70
$500,000 or above$750,000 and above$413,000 and above$491.60

Medicare Part B deductible and coinsurance amounts

The yearly deductible for Medicare Part B is $198 for 2020. You will also be responsible for a 20% coinsurance for many covered services. If your doctor or health care provider accepts assignment for a covered service, you would pay the Part B deductible along with 20% of the Medicare-approved amount for services rendered. Accepting assignment means that your doctor will not charge you more than the Medicare-approved amount for the covered service. You would still be responsible for any cost-sharing.

*Pre-existing conditions are generally health conditions that were in existence before the start of a policy. They may limit coverage, be excluded from coverage, or even prevent you from being approved for a policy; however, the exact definition and relevant limitations or exclusions of coverage will vary with each plan, so check a specific plan’s official plan documents to understand how that plan handles pre-existing conditions.

Learn About Medicare Part C Here

Sarah began working in the healthcare industry in 2001, where she worked for many years with elderly Alzheimer and Dementia patients. From there she worked as a Group Benefits Administrator with a local healthcare company in the Human Resource Department for a period of 10 years. Since then, she has decided to work in the Medicare insurance industry full time and has joined the family business, Ashford Insurance, as a Medicare Insurance Agent.

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